President Dilma Rousseff's government has relaxed tough fiscal rules
in recent years to bolster savings results, resulting in sharp
criticism for lack of transparency and more recently warnings of a
sovereign credit downgrade.
The government has brought forward dividends of state-owned
companies and transferred cash from other funds to bolster state
coffers, for example.
"We did not violate any rules but let's say it was blurry, confusing
even. This will change. It has already changed," Mantega said of
Brazil's accounting practices in an interview with the Estado de S.
Paulo newspaper published on Sunday.
He said Brazil likely would post a primary surplus, which represents
the public sector's excess revenue over expenditures before debt
payments, of 73 billion reais ($31.3 billion) in 2013.
In the most recent monthly data, Brazil posted its smallest primary
budget surplus for October in more than a decade, casting further
doubt on public finances.
"We have had more difficulties making the primary surplus this year,
that's true," Mantega said.
"For next year there is one certainty: the fiscal issue will not be
a problem for the economy in 2014."
He said the government would stop cutting taxes, a cornerstone of
Rousseff's policy to speed up a sputtering economy by encouraging
"We are raising the rates of the PS (Program for Investment), which
reduces the subsidy from the Treasury to BNDES," he said referring
to the state development bank.
"The trend is for (tax) inflows to recover because economic activity
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Investors are skeptical of improved growth in 2014, however, after
data showed the economy contracted for the first time since early
2009 in the third quarter from the second quarter.
Mantega told Estado that an expected tapering of the U.S. Federal
Reserve's economic stimulus program would result in a less volatile
exchange rate for Brazil in 2014.
He said the wobbly real was a reason the government had decided to
slowly raise gasoline prices rather than quickly putting them in
line with international prices as the market, and state-run oil
company Petroleo Brasileiro SA <PETR4.SA>, had wanted.
A Finance Ministry spokesman did not immediately respond to request
for comment on the interview.
($1 = 2.3297 reais)
(Reporting by Caroline Stauffer; editing
by Bill Trott)
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